$25,000 discretionary corpus distribution. Sam’s DNI was $80,000. Identify the treatment of Sam’s cost recovery deductions Please explain, thank you
$25,000 discretionary corpus distribution. Sam’s DNI was $80,000. Identify the treatment of Sam’s cost recovery deductions Please explain, thank you
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Sam Trust operates a welding business. Its current-year cost recovery deductions properly amount to $75,000. Sam’s accounting income was $100,000, of which $40,000 was distributed to first-tier beneficiary Chuck, $25,000 was distributed to second-tier beneficiary Ruby, and $35,000 was accumulated by the trustee. Ruby also received a
$25,000 discretionary corpus distribution. Sam’s DNI was $80,000. Identify the treatment of Sam’s cost recovery deductions
Please explain, thank you
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